When you own a small business, the prices you charge for your products and services should reflect your true value –the value of your time, your effort and your stuff. However, as the person in charge, you may also find that you are asked on a regular basis to discount your pricing. Family members, friends and even random business contacts may request a lower price simply because they know you or they are strapped for cash, and while it is acceptable to help people out occasionally, you must also keep yourself paid and your business afloat. How can you decide what your services are worth? What should you do when asked to give a discount?
As a business owner, you cannot make apologies or excuses for prices that match your true worth. While people are always looking for a good deal, simply psychology suggests that people actually associate higher prices with higher quality and value. You should not out price yourself for your target market, but aim to charge a rate that ensures you make money while still remaining accessible to potential clients. You don’t have to justify your rates, and in many cases, you should not necessarily feel compelled to discount your rates simply because you are asked to do so.
When deciding what to charge for your services and whether or not to offer special pricing upon special request, here are a few things to remember:
- You can’t recover spent time; it is the most precious of all of your commodities. Spend it wisely.
- Money you don’t make now, you will have to make later. If you accept less money for a significant amount work now, you may have to work more hours at a future time to make up for that loss.
- Your prices must reflect the value of what you have to offer, whether that is a physical product or your unique skill set.
Pricing is a tricky thing to address as an entrepreneur. Don’t sell yourself short or allow others to cause you to work hard for nothing, but make sure what you are charging is fair and appropriate for the high-quality and valuable services you offer. This not only will attract clients who are looking for value and return on their investment, but also the kind of customers who come back over and over again.
By Meagan Kerlin for Vertu Marketing LLC